The TIPS (Tech Incubator Program for Startup) is a program that many startups in the ecosystem have heard about, providing both challenges and opportunities. However, as of 2024, what does TIPS mean now? While TIPS remains a trophy for many startups, it is not suitable for all startups.
Is TIPS a Trophy or Genuine Help?
TIPS is often seen as more than just an investment program; it’s considered a trophy symbolizing the growth of a startup. In 2024, TIPS offers support of 500 million KRW over three years, but the financial incentive is not substantial. Instead, many startups use TIPS to prepare for Series A funding.
Case 1: When Lowering Company Value
Here is a story of a startup CEO who was running a booking platform and received pre-Series A investment. To obtain the TIPS title, they had to lower the company’s value, but eventually, they gave up on TIPS and successfully raised 6 billion KRW in Series A. By not choosing TIPS, they achieved greater results.
Case 2: Focusing Solely on Grants
Another startup attempted to simultaneously pursue TIPS and various government projects, but failed. Employees left, and the business couldn’t even be wrapped up properly. TIPS funds are for business support, not cash. Solely relying on the grants can be risky.
How to Utilize TIPS
To properly leverage TIPS, you need to keep several important factors in mind.
1. When It Helps the Business
TIPS selection often helps in securing Series A funding. If your commercialization strategy and global expansion strategy are solid, TIPS remains a useful program.
2. Companies with Core Technology
For companies with core technology, the difficulty of TIPS decreases. If you can get a ticket from an investor, it’s worth a try.
3. When There Is a Profitable Item
If you already have a profitable item, you can focus on technology development through TIPS. From 2024, if your TIPS-related sales exceed 1 billion KRW, you must give up, but in other cases, TIPS can be very helpful.
Conclusion
While the merit of TIPS as a grant has diminished, its value as a trophy remains significant. What startups can gain from TIPS is not just funding but a stepping stone for greater leaps. Ultimately, it’s crucial to judge the right timing and situation for TIPS. Wishing success to your startup!